ISLAMABAD: The federal government introduced amendments on Thursday in the Finance Act 2018’s Income Tax Ordinance, according to which the relief on taxable income has been reduced for the salaried persons.
For an annual salary of 0.4 million rupees, no tax will be applied, while for Rs400,000 to Rs800,000 annual salary, tax will be Rs1,000.
For Rs0.8 million to Rs 1.2 million rupees annual salary, Rs2,000 tax will be applied. Meanwhile, for those earning from Rs1.2 million to 2.4 million rupees, five per cent additional tax will be applied.
According to the new amendment, for those earning Rs2.4 million to 4.8 million rupees, tax will be Rs 60,000 and 10 per cent additional tax will be applied.
For those earning more than Rs4.8 million yearly, a fixed tax of Rs300,000 is payable in addition to 15 per cent of the salary amount above this limit.
As per the Federal Board of Revenue, the tax rate applicable to ‘small companies’ has been further reduced. Starting from 2018, the tax rate charged would be reduced by one per cent each year, making it 25 per cent for 2018, down to 20 per cent from 2023 and onwards“